How To Remove My Money From Robinhood

If you are at all interested in investing, y’all’ve almost certainly heard of Robinhood. The investing app is a favorite among everyday traders who besiege in online forums like Reddit’due south r/WallStreetBets, and has surpassed xviii million active users since its launch in 2013.

The Silicon Valley darling — which grew its post-obit among an investing surge during the COVID-19 pandemic and the ongoing cryptocurrency boom — is a commission-free trading platform, pregnant users can invest in everything from ETFs to Dogecoin without going through a traditional brokerage.

Robinhood went public in July 2021, trading on the Nasdaq under the ticker symbol HOOD. While the company’s revenue hit $565 million in the 2nd quarter — thanks in office to a surge in crypto trading — its third-quarter acquirement dropped significantly to $365 meg.

The platform has seen its fair share of criticism. In June, the company faced the largest fiscal punishment always issued by the Fiscal Industry Regulatory Authority, agreeing to pay $70 1000000 for various regulatory allegations, including organization outages, misleading users and approving customers to trade options — a risky investing move — when it was not appropriate to do so. In early on 2021, Robinhood concise users’ ability to merchandise sure meme stocks like GameStop and AMC, generating the wrath of U.S. traders and lawmakers. Last December, Robinhood was fined $65 million, by the Securities and Exchange Committee (SEC) for allegedly misleading customers well-nigh i of its revenue sources. (Robinhood uses a practise called “payment order flow,” in which a brokerage firm sends client orders to high-speed trading firms in return for cash payments).

The platform’s model allows users to make trades at no cost, merely according to financial planner Tara Falcone, that comes at a steep price.

“It’s fabricated many people think, ‘this is how y’all invest, this is how you build wealth,’ Falcone says. “And while trading individual stocks IS one style to build wealth, that’due south non where well-nigh young people should exist starting.”

Here’s everything you lot need to know almost the trendiest (and near controversial) financial app of the twelvemonth — and whether or not you should apply information technology.

Who uses Robinhood?

The app is popular among young, outset-fourth dimension investors, every bit evidenced past its game-like interface, including celebratory animations and push button notifications when in that location are updates in the market place.

It’s not limited to only Redditors taking on risky investment moves. If you lot practice some proper research, Robinhood tin can, at the very to the lowest degree, serve as a good introduction to investing. But no matter how savvy you are at picking stocks, you’re highly unlikely to trounce the market place over the long term. (Which is why Coin has ever advised new investors to start with passively-managed index funds with proven track records instead.)

The truth is, in that location’s no crystal brawl predicting where the stock market will go next. But look at what’due south happened over the last year: The stock market crashed when COVID-xix hit the U.S. in March of 2020. Merely past August of 2021, the S&P 500 — a benchmark commonly used to measure the broader stock market — was up 100% compared to its pandemic low on March 23, 2020. And despite some turbulence here and there, similar a dip attributed to investors’ concerns nearly the high debt levels of 1 of China’s largest real estate developers, stocks keep soaring to record highs. In October, the S&P 500 and the Nasdaq experienced their all-time monthly performances since last November. Yet, marketplace experts say a market correction (mostly considered a dip of 10% to 20% in stock prices) volition likely be hither before long.

Mean solar day traders volition always try to game the system — even if it’southward normally next to impossible to make boatloads of cash that way. And since Robinhood lets anybody with a bank account buy and sell risky financial products, its appeal is no surprise.

How to invest with Robinhood (
the right way)

Before yous download any sort of investing app, figure out what your motivation is, Falcone suggests. Are yous doing this to make some quick greenbacks? Because you lot have Reddit-induced FOMO? Or because you want to put your money to work responsibly, and are prepared to think about long-term strategies?

“That should help you put blinders on to what you might exist seeing on social media or hearing from your friends,” Falcone says.
“If [certain] types of stock don’t fit into your strategy, then yous should immediately know to ignore those suggestions.”

If you’re approaching this through a fiscal planning lens, brand sure you’ve already paid off all your credit card and high-rate consumer debt. You should also be contributing enough to your employer-sponsored program to maximize any potential friction match benefit — that’s an immediate, guaranteed return on your investment that you can’t look from the stock marketplace.

“Once you are on track for retirement and have boosted cash to invest, you may want to consider adding some individual stocks to your portfolio,” Falcone says. “Even so, information technology is recommended to secure your financial future with diversified securities showtime … either through your employer’s program or an IRA.”

You’ll also want to set up some investing goals before you start trading, Falcone says. Perhaps you desire to invest to help pay for a new couch, a trip to the Commonwealth of the bahamas, an engagement ring, or a downpayment on a future home.

“Determine how much that goal will cost, how long of a time horizon you take to reach it, how much money you take to invest toward it today, and how much yous’ll have to contribute on a weekly or monthly ground to reach that goal using a reasonable expected return for your time horizon,” Falcone says.

How to starting time investing with Robinhood

Investing through Robinhood is equally piece of cake as opening an business relationship. All you need is to exist eighteen years or older, take a valid Social Security number, and a U.S. address.

If you’re new to investing, offset with a small corporeality of money you lot’re OK with losing, and stick to stocks and ETFs.

Falcone suggests creating a diversified portfolio with at to the lowest degree fifteen stocks across different industries and company sizes that you’ve already washed your due diligence on. Thanks to partial shares, you can start investing with just a few dollars.

Every bit you dip your toe in, Falcone suggests getting familiar with investing news sites (like Money.com!) and timely content from verified fiscal planners like herself. Morningstar.com is another good resource for staying upwardly to date on fund performance, investment strategy, and fees.

You tin can also use a stock market simulator to create a “practice portfolio”, which volition help you larn how the market fluctuates over time, and how to make healthy investing habits (like not checking your account a one thousand thousand times a day).

In other words: Acquire to walk before yous run, and take the time to empathize what y’all’re actually buying and selling.

This story has been updated to reflect news that Robinhood redesigned some of the app’s animations and the company’due south initial public offering.

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